As we visit conferences we constantly hear about how new digital business models initiated by start-ups will revolutionize industries, including bringing about the fall of former multinational super-powers, such as Kodak. It almost seems that “business model disruption” is still (or more than ever before) corporations’ biggest fear — without acknowledgement of the huge opportunities arising from it too.

Typically, this view is driven by two factors: First, the fact that reacting correctly to uncertainties is difficult and demands a lot of courage from corporate leaders and their management staff. Second, without knowing from which angle you are being attacked or where new opportunities are emerging, it is hard to develop a counter- or growth strategy and convey this message convincingly to employees.

The good news is, more information than ever before is publicly available to inform strategic decisions and actions. Databases like AngelList, CB Insights and Crunchbase provide all kinds of information on new business models and the hottest start-ups to invest in – the possibilities seem endless and at the same time overwhelming. So, should you just lean back and passively wait to see what’s going to happen? Obviously not — as market circumstances and competitive players change and evolve, you can’t wait to see whether your company will be pushed to the bottom. So, what is the right way to react and shed light on the situation?

When working with our clients, we figured that a three-step approach can help you find potential threats and new opportunities:

It all starts with… knowing your business model

Have you ever tried to break your business down into small little pieces to understand: a) What you need to do to serve your customers (enabler), b) why your customers buy your product (customer proposition), and c) Where you earn money (financials)? No?! Well, now is the time to do so. By breaking your business model down into these three elements, you will finally be able to see, in detail, where future competitors could replace you (through better/easier services) and in which up-and-coming markets you are currently non-existent.

Example business model structure from a payment provider

Next: Research, lots of research

When you have defined your business model and know what to look for, you will be able to scout for new opportunities and threats. All databases are structured and categorized very explicitly and in detail. Now, you and your team’s task is it to find the relevant categories within the databases (Crunchbase, Pitchbook etc.) matching your business model. Focusing only on these categories enables you to identify the most essential start-ups, which are relevant for your business. You can actually foresee the areas where the biggest threats or opportunities are emerging (the higher the current founding/funding rates, the higher the risk/opportunity)!

Example domain map showing funding and founding rates within the business model segments

But you don’t stop here…

Now you have your map but you still need to start walking. Enabling pilot projects, partnerships or investments can be complicated, but it’s also essential. This is not an area where you will win based on academic and theoretical excellence. Building a pilot user base will help you test new services and solutions and receive direct customer feedback – this is your first step towards your future business model and therefore educated decisions about your partner strategy and investments.

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